Many businesses have recently been forced to deal with employees being called to active military duty. USERRA, the Uniformed Services Employment and Reemployment Rights Act, was passed on Oct. 31, 1994, and is the primary law that provides job and benefit protection rights to employees who undertake military service.
The law applies to all employers, regardless of size. USERRA prohibits employers from discriminating against individuals who are members of, apply to be members who perform, apply to perform or have service obligations in the uniformed service.
It also applies to the benefits for which an employee is eligible while on leave. Following is a brief overview of some of the benefits issues that USERRA covers.
Compensation during leave. Employers are not required to compensate employees for absences due to military service. Some employers adapt flexible policies for compensating employees in service. For example, they may pay their employees the difference between what they receive from the armed forces and their regular company salaries. Others continue full payment of wages for a limited period of time. Others will grant the leave of absence without pay.
Health benefits. Employers must provide the option of COBRA-like health plan coverage for employees on military leave as well as for their eligible dependents. Unlike COBRA, USERRA requires all qualified employers that provide health plans to offer this continuation of coverage.
Life insurance coverage (Wisconsin-specific). Employees who are serving in a war must be able to continue insurance coverage on the same basis as any employee who is on a leave of absence. Coverage may continue up to 36 months if the employee continues to pay premiums. The employer must continue to pay the employer share of the premium for as long as the insurance is in force.
Pension contributions/retirement plans. For the purpose of determining an employer’s liability or an employee’s contribution under a pension benefit plan, the employee’s compensation during the period of his or her military service will be based on the rate of pay the employee would have received but for the absence during the period of service.
Employees must be treated as not having incurred a break in service with the employer maintaining the pension plan. Military service must be considered service with an employer for vesting and benefit accrual purposes. The employer is liable for funding any resulting obligations, and the reemployed service member is entitled to any accrued benefits from employee contributions only to the extent that the person repays the employee contributions.
If a person has been absent for military service for 91 or more days, an employer may delay making retroactive pension contributions until the person submits satisfactory documentation. However, contributions will still have to be made for employees who are absent for 90 or fewer days.
In Wisconsin, employers must provide pension credit and all seniority-based benefits to employees who serve. The amount of credit cannot exceed the amount the person would have received had he or she remained continuously employed.
Seniority rights. Employees returning from military leave are entitled to the seniority and other rights and benefits determined by seniority that they would have attained had they not gone on leave. Additionally, employees returning from military leave are entitled to non-seniority-based rights and benefits established by contract, practice, policy or agreement in effect at the beginning of their military service or implemented during the leave.
State law. All states may impose additional obligations on employers with respect to military leave. USERRA is merely a "floor" of benefits for employers, and states are free to increase the benefits and rights employers must provide. Refer to all applicable state statutes when determining your obligations.
Help for small businesses. The U.S. Small Business Administration (SBA) funds loans designed to alleviate the financial impact on small employers from employees taking military leave. Known as the Military Reservist Economic Injury Disaster Loan Program, it provides funds to eligible small businesses for the purpose of meeting ordinary and necessary operating expenses that cannot be satisfied because an essential employee was recalled to active duty in their role as a reservist.
For additional information, refer to the Department of Labor’s Web site at www.dol.gov. The e-laws section of the home page also contains answers to many questions. In Wisconsin, questions regarding USERRA can be directed to the Veterans Employment and Training Representative, U.S. Department of Labor at 608-266-3110. Refer to Section 4318 of USERRA for more details.
Maryann T. Dillon is a health care practice management consultant with Schenck Business Solutions. She can be reached at (888) 556-5580 or dillonm@schencksolutions.com.
May 28, 2004 Small Business Times, Milwaukee, WI
